The UN-SEXY Battery Metal

In 2017 Elon Musk famously said that the batteries Tesla use to power their cars shouldn’t be called Lithium Ion batteries, they should be called ‘Nickle Graphite’ (see this youtube clip for reference https://www.youtube.com/watch?v=HmygPqI0-rw). When this statement was made, it was known that if the word Lithium was mentioned in a press release, any junior mining company would be up 20% the following day.

I chose to write my article on the topic of Nickel, so I could share with everyone what it is, how it’s used and my findings around why more people aren’t talking about it.

So what is Nickel? Nickel is a chemical element recognised as the symbol ‘Ni’ and its atomic number 28. It is a silvery-white lustrous metal with a slight golden tinge. Nickel is a hard but ductile metal belonging to the transition metals section on the periodic table.

Nickel is used for many purposes as it resists corrosion. Due to this, it is ideal to plate other metals in order to protect them. It is, however, mainly used in making alloys such as stainless steel. Nichrome is an alloy of nickel and chromium with small amounts of silicon, manganese and iron. As it resists corrosion, even when red hot, it is used in toasters and electric ovens. A copper-nickel alloy is commonly used in desalination plants, which assist to convert seawater into fresh water. Nickel steel is used for armour plating. Other alloys of nickel are used in boat propeller shafts and turbine blades.

Nickel is used in batteries; including rechargeable nickel-cadmium batteries and nickel-metal hydride batteries used in hybrid vehicles. Nickel has a long history of being used in coins. The US five-cent piece (known as a ‘nickel’) is 25% nickel and 75% copper.

The use for Nickel I would like to concentrate on is in batteries and electric vehicles. The best way to show this will be with the use of images. The first image shows how the battery of an electric vehicle is mainly made up of Nickel, without the Nickel there wouldn’t be a battery.

Source: Vale

As seen in the image below, battery and vehicle manufacturers are moving towards putting 80% nickel into the batteries as Nickel holds the energy density (the greater the density the longer the battery lasts for).

Nickel prices are currently around $12 500 USD per tonne, but as you can see from the graph below, that is historically low. You can also see that the peak price was in 2007 where Nickel touched $50 000 USD per tonne.

Source: Markets Insider

Since the peak in 2007, stock levels have been running down. It is estimated that Nickel supply will reach a deficit around 2022. The graph below shows warehouse stock levels dropping drastically. This is where I see a window of opportunity for the Nickel price to bounce.

If projections on Nickel stock levels are correct and there is the is a deficit by 2022, electric vehicle manufactures will have a MAJOR problem. Multiple analysts have said once the price of a vehicle battery reaches a cost of $100 per kilowatt hour, an electric vehicle will cost the same as a petrol vehicle to buy. The graph below shows that most of the world will be at that price point by NEXT YEAR.

Source: Vale

With the demand for Nickel due to rise by a factor of 20 within the next 10 years (shown in the below) and warehouse stock due to be in deficit within the next two years (shown in the blue graph below), I feel this creates a perfect storm for the Nickel price and Nickel mining companies to have their time in the sun.

Source: Vale

I hope that my post has helped you to have a better understanding of Nickel and its importance in our very near future.